The scandal with the QuadrigaCX exchange, during which the largest cryptocurrency exchange in Canada lost $ 150 million of cryptocurrency, shook the financial space.
The reason for this was the death of CEO Gerald Kotten, who individually controlled the company’s assets and user funds. The interest in this story is that only the deceased CEO of the exchange had the keys to a cold wallet.
Despite the fact that back in 2014, Kotten emphasized the risk of storing private Bitcoin keys on offline wallets. Most major cryptocurrency exchanges use cold wallets to hold most of their digital assets, because cold wallets are not cracked.
However, when the private key is available to two or more managers, even in the event of the loss of one, user funds can be recovery.
It became difficult for analysts to believe that a specialist in the field of cryptocurrency, who has in-depth knowledge of how cold wallets work and who are responsible for storing $ 150 million, simply kept all of the company’s funds on his personal laptop.
One of the main problems in the QuadrigaCX case is that if the CEO died with private keys, investigators had to find backup or cold wallets using Bitcoin or Ethereum’s open network of blockchains.
However, many independent researchers could not find any evidence supporting the existence of cold wallets that hold $ 150 million.